No fee banking for vulnerable groups doesn’t reach everyone

Today Minister of Finance, Joe Oliver, announced that eight of the big banks in Canada will be offering no-fee accounts for specific vulnerable groups. The catch – the number of people that will be eligible is a small portion of those living in poverty. The CBC Power and Politics (PnP) asked CWP for a statement on the issue and questioned the Minister on the impact this change would have. See below for our response to the announcement and link to PnP:

The federal government’s efforts to reduce or eliminate bank fees for seniors, youth and persons with disabilities is a welcome announcement. It is important for the government to implement changes that have a positive impact on the most vulnerable in society in order to enhance the ability of these individuals to move forward. However, this measure is not comprehensive in scope and focuses on specific groups of low-income people while leaving the vast majority without support. While the government wants to “protect consumers and save Canadians money”, the vulnerable groups eligible for the low/no-cost bank accounts announced today amount to under 70,000 who have access to a Registered Disability Savings Plan (RDSP), and under 2 million seniors who are eligible for the Guaranteed Income Supplement (GIS). While Minister Joe Oliver touts that 7 million people will have access to these accounts (including youth), approximately 90% of people living in poverty may not. This includes unattached individuals under the age of 65 as well as non-elderly families.

Individuals part of the working poor population, lone-parent families, Aboriginal populations, recent immigrants and refugees who are do not have an RDSP, are not classified as a student and are under the age of 65, therefore not receiving the GIS, will not be affected by this announcement. This is the majority of the poor population who could also use the $50 extra per year that those eligible for the new accounts will receive.

Canada Without Poverty also has a concern with the fact that this announcement is based on ‘voluntary commitments’ from the major banks – two of which eliminated low-cost accounts in 2012 (TD Bank and RBC). It will be difficult to effectively implement these changes without concrete guidelines and bank policies in place.

In order to have a profound impact on poverty, all vulnerable populations should be able to access this service. This option should be one of many as part of a larger national poverty plan the federal government should develop that would ensure support for all marginalized groups instead of a patchwork system of specific measures targeted at a small percent of the vulnerable population. This would demonstrate federal leadership for the well-being of the most vulnerable in our society, as well as respect the international human rights obligations Canada has committed to.